Legal Update February Vol. 2018

Publications Admin

PR ACT 28-2018 GRANTS SPECIAL PAID LEAVE FOR EMPLOYEES SUFFERING FROM SEVERE ILLNESS OF CATASTROPHIC NATURE

PR Act 28, known as “Ley de Licencia Especial para Empleados con Enfermedades Graves de Carácter Catastrófico”, was recently signed into Law in Puerto Rico.

The purpose of this law is to provide employees who suffer severe illness of catastrophic nature, as defined by the law, additional paid leave to tend to their treatment and medical appointment and to minimize the employees’ concerns that their employment might be affected when they take time to attend these treatments and appointments.

Act 28 provides a special paid leave of six (6) days per year for employees who qualify and who suffer from a catastrophic illness as defined by the Law. To qualify for this special leave, the employee must have worked for the company for at least twelve (12) months, must have worked a minimum of at least one hundred and thirty (130) hours monthly, and must have used up all their sick leave. The employer cannot require the employee to use this special leave until they have used all their sick leave.

The six (6) days per year special leave can be used annually and it cannot be accumulated nor transferred to the following year. Upon the employee’s employment termination, voluntary or involuntary, the leave or any remaining portion of it, will not be paid out to the employee. The special leave can be used through divided, flexible or intermittent schedules. The use of this special leave will be considered as time worked for accrual purposes of other employee benefits.

The Act defines “catastrophic illness” to include AIDS, Tuberculosis, Leprosy, Lupus, Cystic Fibrosis, Cancer , Hemophilia, Aplastic Anemia, Rheumatoid Arthritis, Autism, Post-Organ Transplant, Scleroderma, Multiple Sclerosis, Amyotrophic Lateral Sclerosis (ALS), and Chronic Kidney Disease in levels 3-5.

The employer cannot take into consideration the employees’ use of this special leave for purposes of disciplinary actions, evaluations and other employment related decisions.

The employer can require a medical certificate certifying that the employee suffers from a catastrophic illness covered by the Law and that he/she continues to receive medical treatment for said illness. Any request for medical information under Act 28 must comply with HIPAA.

Employees who comply with the requirements of Act 28 can use the special leave granted immediately once the Law becomes effective.

Act 28 applies to governmental employees and to private employers as defined by PR Law 4-2017. The Act becomes effective on February 20, 2018.

Act 28 grants authority to the Secretary of Labor and Human Resources to investigate, receive and file claims and impose penalties for failure to comply with the Law.

For additional information and/or assistance in complying with Act 28, please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr .com) and/or Gerardo Hernández (ghernandez@nrhlawpr.com).

PUERTO RICO SUPREME COURT DETERMINES THAT STRICT PRODUCT LIABILITY DID NOT APPLY BECAUSE A SHRIMP CONTAMINATED WITH SAXITOXIN WAS NOT “MANUFACTURED” AS IT BECAME CONTAMINATED WITHOUT HUMAN INTERVENTION

In the case of Gonzalez Caban v. JR Seafood, Civil Case No. 14-1507 (GAG), the United States District Court for the District of Puerto Rico certified the following question upon the Puerto Rico Supreme Court:

“Under the principles of product liability, is a supplier/seller strictly liable for the damages caused by human consumption of an extremely poisonous natural toxin found in a shrimp, even if said food product (and its “defect”) are not a result of manufacturing or fabrication process? If the previous question is answered in the affirmative, would it make a difference if the “defect” of the food product is readily discoverable scientifically or otherwise?”

This question was presented to resolve the complaint filed under diversity jurisdiction by Plaintiff against JR Seafood Inc., Integrand Insurance Company, Packers Provisions of Puerto Rico Inc., Ramón Gutiérrez, Evaristo Rivera Berrios d/b/a Restaurante El Nuevo Amanecer, and Cooperativa de Seguros Múltiples.

In the complaint, Plaintiff alleged that on February 19, 2004, he got intoxicated after consuming a toxic shrimp at Restaurante El Nuevo Amanecer, in Coamo, Puerto Rico and that he is entitled to compensation in damages. Plaintiff claimed that the consumption of the shrimp made him suffer paralytic shellfish poisoning that permanently deteriorated his health to the point of incomplete quadriplegia, which bound him to a wheelchair.

The sellers and supplier of the shrimp filed a Motion to Dismiss Plaintiffs’ complaint under Rule 12 (b)(6) where they argued that they could not be held strictly liable to a restaurant diner who allegedly had sustained permanent injury from eating shrimp contaminated with a natural toxin because the shrimp was not a “manufactured product”. Because there was no precedent, the US District Court concluded that said matter constituted an unsettled issue of Puerto Rico law which should be resolved by the Puerto Rico Supreme Court.

The Puerto Rico Supreme Court answered the question by ruling that strict liability did not apply because a shrimp contaminated with saxitoxin was not “manufactured” because it became contaminated without human intervention. Using this principle in the present case, the district court concluded that the diner’s strict liability claims could not proceed.

For additional information please contact attorney Nestor J. Navas (nnavas@nrhlawpr.com) and/or Fred Gautier Lugo fgautier@nrhlawpr.com).

ARE YOU TAKING ADVANTAGE OF ALL TOOLS AVAILABLE TO MAXIMIZE YOUR EARNINGS?

Hurricane Maria changed Puerto Rico and created a new reality for those doing business within the Island’s jurisdiction. The challenges encountered in today’s commercial landscape have required that many businesses and corporate entities doing business in Puerto Rico, reevaluate their structure, corporate configuration and personnel operations.

Understanding a company’s operational needs is essential to develop a corporate structure that can maximize earnings by taking advantage of Puerto Rico’s current laws and situation.

At NRH we are prepared to assist you in evaluating your corporate structure to provide those recommendations that will lead to maximization of earnings, while complying with Puerto Rico’s current legal landscape.

Do not hesitate to contact us to set up a meeting and discuss how to improve your business.

For additional information please contact attorney Nestor J. Navas (nnavas@nrhlawpr.com) and/or Fred Gautier Lugo fgautier@nrhlawpr.com).

NRH HUMAN RESOURCES CONSULTING SERVICES

The challenges encountered in today’s commercial landscape require that all entities doing business in Puerto Rico reevaluate their corporate structure and personnel needs to maximize earnings. In doing so, the figure of the Human Resources Manager becomes of instrumental value to a company.

At NRH we recognize that not all small businesses can afford to have a human resource manager or department. Considering the aforementioned, we offer our clients the advantage of outsourcing the work performed by a company’s human resources department in a cost-effective way.

At NHR we have experienced human resources specialists, who as attorneys, have both the experience and expertise for effectively managing your employment matters offsite, at a reduced rate.

If you wish to inquire into the possibility of outsourcing your HR needs, please do not hesitate to contact us to set up a meeting to discuss how we can assist you in reducing your operational costs while assisting you on these matters.

For additional information please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr.com) and/or Fred Gautier Lugo (fgautier@nrhlawpr.com)

Legal Update February 2018

Publications Admin

Amendment to Puerto Rico Minimum Wage, Vacation, and Sick Leave Act

On January 27, 2018 Act No. 60 became law and amended Article 6 of Puerto Rico Minimum Wage, Vacation and Sick Leave Act, Act No. 180 of July 27, 1998. This amendment granted greater protection to non-exempt employees in the private sector covered by the law, by prohibiting employers from taking into consideration the employees’ valid use of their sick leave for disciplinary actions and/or performance evaluation purposes. The amendment added subparagraph “p” to Article 6 to state that no employer, supervisor or their representative, can use, as part of the company’s administrative process or as their policy, the justified sick leaves, as criteria of an employees’ efficiency for purposes of their evaluation process, salary increase or promotions. The amendment further states that the employer cannot consider the employees’ absences due to illness and charged correctly to his/her sick leave, to justify disciplinary actions such as employment suspensions and terminations.

The reasoning behind this amendment is that it is contradictory that the very Law that grants an employee the right to sick leave, allows employers to penalize the employee for using such sick leave. The legislators find that it is a violation of this right granted by law, that an employer establishes an internal policy where they consider justified absences under the Law as irresponsible absences, and that they will be used as criteria which could negatively impact and employees’ performance evaluation, promotion and/or salary increases. Moreover, the legislators further state in their reasoning that allowing an employee to go to work in adverse health conditions could violate the employees’ constitutional and civil rights. As to instances when an employee might misuse this right, the Law’s motive states that employers have mechanisms, such as investigating the veracity of the medical certificate or getting a second medical opinion, to verify that the employee is using correctly the right granted by law. This amendment became effective immediately.

For additional information please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr.com) and/or Gerardo Hernández (ghernandez@nrhlawpr.com).

Legal Update November 2017

Publications Admin

Puerto Rico: A Month After Hurricane María

On Tuesday September 19, 2017, we thought we had done everything within our control to prepare for Hurricane María.  After September 20, 2017, we realized that nothing could have prepared us for the devastation and sheer horror that Hurricane María left in our island.  Besides leaving us with no power and water, for most of Puerto Rico still to date, Hurricane María took away thousands of homes, left many with no food, and took away years of developments and improvements at the Island.  At Navas Rodríguez & Hernández, we were fortunate that our office suffered no physical damage and are doing our part to bring Puerto Rico back.

On October 20, 2017, the Island underwent its first 30 days following Hurricane María. To date, a significant amount of municipalities in the Island continue to be without power and with limited access to the internet.  Moreover, most land line phone service is down as well.  While running water is available at most municipalities, some of the remote areas continue to lack any utility services. While the U.S. Postal Service has been in operation since early October, it is significantly delayed. Express courier service such as UPS and Fed Ex are overwhelmed with the amount of packages to distribute and are experiencing significant delays as well.  Most businesses as well as government agencies that are open are working on reduced schedules to offset costs associated with operating on power generators, deal with heavy traffic and to ensure safety. Courts will resume hearings on civil matters after starting operations on criminal and family matters in October.

At NRH, we have been operating from a temporary location since early October and should be ready to move back to our office as soon as power is restored. Published reports state that tests are underway for the main power generating plant in the San Juan metropolitan area to start serving customers this week. Shortly before and following the hurricane, we attended the Annual Meeting of the National Association of Minority and Women Owned Law Firms (NAMWOLF) in New York and rolled out our upgraded website and social media sites in Linked In and Facebook.  We are indeed open for business and determined to do our part in building back our Island.

Following the passing of Hurricane María. most developments of legal relevance have been related to consumer protection orders by the Department of Consumer Affairs (DACO) to further keep its freeze on prices of goods of need during the emergency, actions by the Puerto Rico Department of Treasury to allow exempt status to aid received by individuals from third parties, including disaster aid payments from employers.  Also, an opinion was issued by the Secretary of Labor on the payment of wages to exempt and non-exempt employees during hurricanes.


DACO Issues Order Extending Price Freeze Over Goods of Need

On September 3, 2017, the Department of Consumer Affairs issued Order 2017-004, which set forth a price freeze over goods of need    (i.e. canned and fresh food, water, medication, power generators, etc.) due to the imminent passage of Hurricane Irma. Following several extensions of said order to respond to the emergency caused by Hurricane María, including one which set forth an approval process for price increases for goods of need by wholesalers and retailers, on October 18, 2017, DACO issued Order 2017-018, to automatically approve price increases over goods of need as long as the business notifies DACO of the price increase by a supplier and it maintains the same or lower profit margin it had prior to the increase. Said order also sets forth the applicable mechanism for pricing and profit margins of new goods brought in to substitute goods of need previously sold by a merchant or for a merchant who sells goods of need for the first time.  For additional information and details over this Order please contact attorney Fred Gautier Lugo (fgautier@nrhlawpr.com)


PR Treasury Department Issues Administrative Determination on Disaster Aid Payments to Employees by Employers

In order to adequately offer guidance to employers and other entities on the tax treatment of disaster aid payments, the Puerto Rico Department of Treasury issued on October 5, 2017, Administrative Determination DA-17-21, which sets forth the rules for exempt disaster aid payments to employees.  In essence, employers are authorized to make tax exempt payments to employees for up to $1,000 per month to assist them with damages sustained from Hurricane María.  This payment must be in addition to the compensation ordinarily received by the employee and cannot be attributed or related to the employee’s position or salary.  Moreover, employers are also allowed to provide interest free loans to employees for up to the total amount of $20,000.  Aid payments are to be made between September 21, 2017 to December 31, 2017.  Please contact us if you are interested in learning of all requirements set forth by PR Treasury in order to comply with the law. For additional information please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr.com) and/or Gerardo Hernández (ghernandez@nrhlawpr.com).


PR Secretary of Labor Issues Opinion on Payment of Wages to Employees due to Days Not Worked as Result of the Passage of a Hurricane

In order to offer guidance to employers on the payment of salaries to employees stemming from days not worked due to the passage of  a hurricane, on October 17, 2017, the Puerto Rico Secretary of Labor issued an opinion (2017-001) which, in essence, confirms the long-standing interpretation that an employer has no legal obligation to pay a non-exempt employee for time not worked as the result of a natural disaster.  Nonetheless, the Secretary urged employers to be sensitive of the situation and allow employees to be paid from accrued vacation time so that they can adequately respond to needs stemming from the state of emergency caused by the passage of hurricanes Irma and María.

On the other hand, the Secretary is of the opinion that employers are legally obligated to pay exempt employees for time lost due to a business closing that is less than a full week of work.  However, no such obligation exists when no work whatsoever is performed during a full week.

However, regardless of the Secretary’s opinion, those employers who have a policy in place that allows for payment in the event of business closures caused by a natural disaster, will be legally bound to comply with their own policies.  We remain at your disposal should you need any assistance in complying with said opinion.  For additional information please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr.com) and/or Gerardo Hernández (ghernandez@nrhlawpr.com).


PR Department of Labor issues new regulation to manage PR Law No.148 of 1969 on Christmas Bonus for Private Employers

On September 18, 2017, the PR Department of Labor and Human Resources issued an updated regulation for private employers to manage the payment of the Christmas bonus.  The new regulation essentially updated the prior regulation to include rules applicable to the changes made to the bonus payment to employees hired after the labor reform contained in PR Law 4 of 2017 which reduced the amount of the bonus payable to new hires, among a series of other changes, including an increase to the amount of hours worked needed to be eligible to the bonus.

If you need further assistance with this new regulation, please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr.com) and/or Gerardo Hernández (ghernandez@nrhlawpr.com).

Legal Update Volume 2017, Number 3

Publications Admin

NAVAS RODRIGUEZ & HERNANDEZ OBTAINS SIGNIFICANT DEFENSE JUDGMENT ON APPEAL

On Appeal on behalf of the Municipality of Carolina, attorneys Fred Gautier Lugo and Nestor J. Navas D’Acosta obtained Judgment from the Puerto Rico Court of Appeals, whereby the award for damages imposed by the Court of First Instance was determined to exceed the limits of statutory provisions, thus diminish the exposure of the Municipality.

For additional information please contact attorney Fred Gautier Lugo or Nestor Navas D’Acosta. (fgautier@nrhlawpr.com/nnavas@nrhlawpr.com).


MEDICAL MALPRACTICE UNDER PUERTO RICO LAW

Under Puerto Rico law, three elements comprise a prima facie case of medical malpractice: a party must establish (1) the duty owed; (2) an act or omission transgressing that duty; and (3) a sufficient causal nexus between the breach and the harm. Otero v. United States, 428 F.Supp.2d 34, 45-46 (D.P.R.2006) (citing Rivera v. Turabo Med. Ctr. P’ship, 415 F.3d 162, 167 (1st Cir.2005)).

Puerto Rico courts have explained the duty owed to a patient as that level of care which, recognizing the modern means of communication and education, meets the professional requirements generally acknowledged by the medical profession. Otero, 428 F.Supp.2d at 46; see also *149 Rivera v. Turabo Med. Ctr. P’ship, 415 F.3d 162, 167 (1st Cir.2005) (citing Lama v. Borrás, 16 F.3d 473, 478 (1st Cir.1994)) (quoting Oliveros v. Abreu, 1 P.R. Offic. Trans. 293, 101 P.R. Dec. 209, 226 (1973)).

The standard is considered national and should generally be proven through expert testimony. Otero, 428 F.Supp.2d at 46.In Puerto Rico to establish causation, a plaintiff must prove by a preponderance of the evidence, that “the [medical provider’s] negligent conduct was the factor that ‘most probably’ caused harm to the plaintiff.” Rivera v. Turabo Med. Ctr. P’ship, 415 F.3d 162, 168 (1st Cir.2005).

Causation usually cannot be found based on mere speculation and conjecture. Expert testimony is generally essential in order to clarify complicated medical issues that are more prevalent in medical malpractice cases than in standard negligence cases. Otero, 428 F.Supp.2d at 46.Thus in Puerto Rico, the decision to prevent the plaintiff’s expert from testifying equals the dismissal of a case as Plaintiff cannot prove a doctors negligence, without an expert witness.

For additional information please contact attorney Nestor Navas D’Acosta (nnavas@nrhlawpr.com).


DEFENDING A MEDICAL MALPRACTICE CLAIM

 

For most doctors facing a medical malpractice lawsuit can be an extremely frustrating experience, in terms of their personal liability and their professional reputation. Furthermore, a medical malpractice suit places the doctors in position to answer questions from lawyers who have never set foot in medical school and who probably do not understand their actions.

Notwithstanding, it is imperative for a doctor to properly handle a medical malpractice suit and to do so he has to be prepared to handle said claim, whenever it appears. To do so, we recommend that each doctor have a lawyer available at any time, since the assistance of the lawyer can aide the doctor through the process of being sued and most importantly can be essential in the preparation of a proper defense against the suit.

Key issues for a doctor to keep in mind when en or she is sued for medical malpractice:

  1. It is not personal;
  2. Being sued for malpractice certainly does not mean that the doctor did anything wrong or will be held liable for medical negligence.
  3. For a medical malpractice defense to be properly developed and be implemented, it is important that the doctor has the necessary patience to allow the lawsuit process to work.
  4. The doctor should know that most medical malpractice cases last 2-5 years. That can be a long time for a malpractice claim to be hanging over a doctor’s head, but there is little a doctor can do to accelerate the process.
  5. The doctor should always remember that a medical malpractice case is a judicial process with an established set of rules and procedures
  6. Assuming the doctor carries medical malpractice insurance, the insurance company’s lawyer will handle most of the heavy lifting throughout the case, but there are four major things that the doctor should expect to do during the course of the case.
  7. A doctor should always hire an attorney to handle the portions of his liability that is in excess of his policy limits.

For additional information please contact attorney Ignacio Gorrrin Maldonado or Nestor Navas D’Acosta. (igorrin@nrhlawpr.com/nnavas@nrhlawpr.com).


COMMENCEMENT OF AN ACTION UNDER TITLE VI OF THE PUERTO RICO OVERSIGHT, MANAGEMENT, AND ECONOMIC STABILITY ACT,

On May 16, 2017, Hon. Aida M. Delgado-Colón, in her position as Chief United States District Judge informed that the United States District Court for the District Court of Puerto Rico adopted new Local Civil Rule 3.1. Said Rule will govern the filing and docketing of any civil action which is commenced by the presentation, as an initial document, of an application for approval of a Qualifying Modification, as defined in the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”). Specifically, Civil Rule 3.1 reeds:

“A civil action for relief under section 601(m)(1)(D), 48 U.S.C. § 2101(m)(1)(D), of Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), is commenced by filing an application for approval of a Qualifying Modification as define in PROMESA, and as provided in section 601(m)(1)(D).

The application shall be filed with the clerk of the court, and the clerk shall open a docket for the action. “

For additional information please contact attorney Ignacio Gorrrin Maldonado or Nestor Navas D’Acosta. (igorrin@nrhlawpr.com/nnavas@nrhlawpr.com).

Legal Update Volume 2017, Number 1

Publications Admin

Changes In Puerto Rico’s Labor Laws

In an effort to stimulate the economy of the Island, newly elected Governor Ricardo Roselló Nevárez has promoted a change in certain of Puerto Rico’s Labor Laws. The Labor Transformation and Flexibility Act, which has to date, been approved by The Senate and House of Representatives becomes now a reality with which all industries doing business in Puerto Rico have to comply with.

If you wish to examine how the Labor Transformation and Flexibility Act, impacts your business and/or how to take benefit of the newly approved changes to Puerto Rico’s labor laws, please contact our office at your earliest convenience.

NAVAS RODRIGUEZ & HERNANDEZ OBTAINS SIGNIFICANT DEFENSE JUDGMENT IN PREMISES LIABILITY CASE

Attorney Fred Gautier Lugo obtained a judgment in favor of the Municipality of Carolina in the case of Sylvia Santa Rivera v. Municipio de Carolina; Civil Case Number FDP 2011-0130 (406). Through the judgment, the Court dismisses the complaint against the Municipality for Plaintiff’s failure to prove a case of slip and fall under Article 1802 of the Puerto Rico Civil Code.

Employees expenses concerning millage and per diem constitutes an economic benefit and can be recovered by an employee under Art. 11(a)of the The Minimum Wage, Vacation, and Sick Leave Act of Puerto Rico (Minimum Wage Act.

Through the case of José Julio Cardona Caraballo v. Autoridad de Carreteras y Transportación, 2016 TSPR 242 196 DPR ____, the Puerto Rico Supreme Court in a decision issued by Honorable Judge Estrella established that employee’s expenses concerning milage and per diem constitute an economic benefit that all employees can recover under Art. 11(a) of Law Number 180 of July 27, 1998.

For additional information please contact attorney Carmen Lucía Rodríguez Vélez (clrodriguez@nrhlawpr.com) and/or Gerardo Hernández (ghernandez@nrhlawpr.com).

Legal Update Volume 2016, Number 6

Publications Admin

FINAL OVERTIME RULE’S APPLICATION IN PUERTO RICO STAYED AS RESULT OF PROMESA

As we had anticipated in our May issue of NRH Legal Update, the application of the U.S. Department of Labor’s Final Overtime rule in Puerto Rico has been stayed.  Under the Final Rule, which was to take effect in Puerto Rico on December 1, 2016, the salary basis for exempt employees was to double from $23,660 to $47,276, annually, thus creating a significant burden for employers in the Island.

However, on June 30, 2016, President Obama signed the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) into law. As a result thereof, the Final Rule will be on hold and its application in Puerto Rico will be contingent on a report to be prepared by the Comptroller General within two years and a subsequent certification by the Secretary of the U.S. Department of Labor to Congress that applying the Final Rule to Puerto Rico would not have a negative impact on the economy of Puerto Rico.

These are welcomed news by local employers already burdened by the existing economic crisis in the Island.

NAVAS RODRIGUEZ & HERNANDEZ OBTAINS SIGNIFICANT DEFENSE JUDGMENTS IN EMPLOYMENT AND INSURANCE DEFENSE CASES

During the month of June, the Firm obtained three significant victories by our Employment Law and Insurance Defense practices.

First, Carmen-Lucía Rodríguez and Néstor Navas teamed up in obtaining a defense judgment by the U.S. Court of Appeals for the First Circuit in the case of Gisela Vélez-Ramírez v. Commonwealth of Puerto Rico, et als.  In said Judgment, following an oral argument before the First Circuit during their visit to San Juan, the Appellate Court affirmed a prior Judgment by the U.S. District Court for the District of Puerto Rico dismissing a complaint of disability discrimination and retaliation against a local correctional health institution, via summary judgment. The Opinion and Order of the First Circuit Court of Appeals can be found at 2016 U.S. App. LEXIS 11729 and http://caselaw.findlaw.com/us-1st-circuit/1740232.html.

Secondly, Gerardo (Jerry) Hernández and Néstor Navas teamed up in obtaining a defense award in a wrongful termination case before the American Arbitration Association.  In the case, a former Store Manager claimed to have been wrongfully discharged and demanded over $160,000 in compensation, plus attorney’s fees.  Under the defense award issued by the arbitrator, the employer was deemed to have terminated the employee with just cause and the petition was denied in its entirety.  The defense award comes close to a year after another successful defense award in an arbitration involving a claim of wrongful discharge and age discrimination.

Finally, Néstor Navas obtained a defense judgment following trial in a premises liability case involving the Municipality of Guaynabo.  In the case, Plaintiff claimed over $75,000 in damages following a slip and fall incident.  It is important to note, however, that not only did the Court find no liability whatsoever on the Municipality, but also, deemed the lawsuit frivolous and ordered Plaintiff’s counsel to pay all the costs and reasonable attorney’s fees incurred by the Municipality in their defense.

PAYROLL STATEMENT DUE TO STATE INSURANCE FUND ON JULY 20, 2016

Lastly, a friendly reminder that all Puerto Rico employers must submit to the State Insurance Fund their payroll statement for purposes of securing their worker’s compensation coverage in the Island by July 20, 2016.  Please note that this is a key requirement for maintaining the employers’ immunity against lawsuits as an insured employer.  Feel free to contact us should you need any assistance on this regard.

Legal Update Volume 2016, Number 4

Publications Admin

Cooperativa de Ahorro y Crédito Oriental v. Consejo de Titulares Cond. Beach Village; Palmas del Mar Homeowners Association, Inc.;,   2016 TSPR 79 ; 195 DPR ____  

In one of it’s latest decisions, the Puerto Rico Supreme Court has decided that a mortgage creditor who gains possession of a property through a nonrecourse debt, should be considered as voluntary title holder under Puerto Rico’s Condominium Law and or under the Puerto Rico’s Control Access Law; and as such is solitarily responsible for any maintenance debt and or common property debt that said property has at the time of the property acquisition.

For more information, feel free to contact Ignacio Gorrin Maldonado, Esq. igorrin@nrhlawpr.com.

Legal Update Volume 2016, Number 3

Publications Admin

U.S. Department of Labor Final Overtime Rule:  What’s next

On May 18, 2016, the U.S. Department of Labor issued the much anticipated Final Overtime Rule.  The Final Rule, which takes effect on December 1, 2016, doubles the salary threshold—from $23,660 ($455 weekly) to $47,476 per year ($913 weekly)—under which most salaried workers are guaranteed overtime. Additionally, the Final Rule added a provision allowing employers to count nondiscretionary bonuses, incentives, and commissions toward up to 10 percent of the required salary level for the standard exemption, so long as employers pay those amounts on a quarterly or more frequent basis.

Moreover, beginning on January 1, 2020, this new salary level will be automatically updated every three years.  However, the final rule does not have an impact on employees who are not subject to either the salary basis or salary level tests, such as doctors, teachers, lawyers and outside salespeople.  Likewise, the Final Rule did not alter the standard duties test for employees who primarily perform executive, administrative, or professional duties

Since the increase in the salary threshold is significant, the issuance of the Final Rule provides employers an excellent opportunity to evaluate their existing exempt workforce by classification to determine the most cost-effective way of complying with this new rule.

For instance, some employers might consider, implementing flexible work schedules using the Puerto Rico Flextime Act in order to reduce overtime caused by working in excess of 8 hours in a 24 hour rolling period as a result of shift changes.  Also, employers could evaluate adequate staffing initiatives for purposes of eliminating the need of incurring overtime or minimizing it. Also, employers can design incentives and bonuses based on desired Company goals to offset the cost of increasing the salary basis with additional income generated by the productivity motivated by the incentives and bonuses.

Furthermore, employers can evaluate whether to increase a particular employee’s salary basis by comparing the cost of the salary basis increase versus the estimated cost of overtime to be incurred by the employee in said role.  With adequate monitoring and controls of overtime usage, employers may be compelled to increase the salary basis in instances of job classifications that have higher overtime hour demands.

In fact, the DOL provides in Q&A guide in its website that employers do not have to convert employees earning below the new salary threshold to hourly pay.  Hence, employers may opt to leave the existing salary in place and pay overtime whenever it is incurred.

To complicate matters further, employers should be mindful of the effect the final version of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), HR 5278 of May 18, 2016, may have on the applicability of the Final Rule to Puerto Rico.  As it currently stands, section 404 of HR 5278, bars the application of the Final Rule to Puerto Rico until a report from the Comptroller General assessing the impact of the Final Rule is prepared and the Secretary of Labor certifies to Congress that applying the Final Rule to Puerto Rico would not have a negative impact on the economy of Puerto Rico.  The timeline for the report by the Comptroller General is two years.  Hence, if PROMESA is approved as drafted, the Final Rule will not apply in Puerto Rico for quite some time.

In sum, we understand the next 6 months or so will offer employers adequate time to consider all available options to comply with this new rule, if and when Congress determines whether to approve PROMESA.   We are available to assist you in your compliance efforts as it pertains to this rule.  For more information, feel free to contact Carmen Lucía Rodríguez, Esq. or Gerardo J. Hernández, Esq. at clrodriguez@nrhlawpr.com or ghernandez@nrhlawpr.com.

Legal Update Volume 2016, Number 2

Publications Admin

Supreme Court of Puerto Rico holds that employer’s failure to provide adequate place for breast milk extraction may constitute a violation of an employee’s right to privacy under the Constitution of Puerto Rico in certain circumstances.

On what may be Chief Justice Fiol Matta’s last opinion as a member of the Supreme Court of Puerto Rico, on January 25, 2016, the Court issued an Opinion in Siaca v. Bahia Beach Resort & Gulf Club, case no. AC-2012-102, published opinion pending, holding that an employer’s breach of its duty to provide a private, hygienic and safe place for extracting breast milk in the workplace may amount to a violation of an employee’s right to privacy under the Constitution of Puerto Rico. Under the Constitution of Puerto Rico, an individual’s right to privacy is enforceable against private parties, including an employer.

The Siaca opinion is the first instance where the Supreme Court of Puerto Rico had the opportunity to interpret Law 427 of 2000, as amended by Law 239 of 2006, which are the local laws that require private sector employers to provide a period of up to one hour to employees for purposes of breastfeeding a child of up to twelve (12) months or extracting breast milk. Moreover, said statute, limits itself to establishing a duty on the employer to enable a location for said duties although Law 239 makes reference in its statement of legislative intent, to a place that is private, hygienic and safe for said purpose.

In the case at hand, the issue was whether the employer’s conduct in failing to provide an adequate place for extracting breast milk amounted not just to a violation of Law 427, as amended, which does not provide for damages, but also amounted to a violation of the employee’s right to privacy under the Puerto Rico Constitution, which would allow for damages to be awarded.

While the Supreme Court of Puerto Rico did not conclude that an employer must specifically designate a place that is exclusively used for breastfeeding or breast milk extraction, the Court did set forth that the area must afford sufficient privacy such as window covering, locks and be clean such as to avoid dust and other health risks.   Clearly, an office or storage area that is over crowded, with no ventilation or access to electricity is unlikely to be suited.

Moreover, the Court made clear that since the conduct in question was rather outrageous and resulted in actual damages to the Plaintiff because she had to end breastfeeding her child because she suffered depression that affected her ability to adequately produce breast milk and feed her child as a result of her employer’s failure to provide an adequate location for said activities, there was indeed a violation of the employee’s constitutional right to privacy.

Nonetheless, the Court made clear that not all violations of Law 427, as amended, amount to a constitutional violation.

In conclusion, it is important for employers to be proactive when it comes to designating a location for breastfeeding or breast milk extraction at the workplace.  Employer’s must ensure that other employees understand the private nature of such activity and that the place designated, even if an office, be neat and clean and not cramped,  and be properly ventilated, easily accessible from the place where the employee is assigned, has a sign and lock to avoid interruptions, and is kept clean and free from clutter.  Failing to provide an adequate place for breast milk extraction at the workplace which interferes with a mother’s choice to breastfeed her child will now result in an award of damages rather than a mere administrative fine.

We are available to assist you in your compliance efforts as it pertains to this opinion.  For more information, feel free to contact Carmen Lucía Rodríguez or Gerardo J. Hernández at clrodriguez@nrlawpr.com or ghernandez@nrlawpr.com.

Legal Update Volume 2016, Number 1

Publications Admin

On December 31, 2015, Governor, Alejandro García Padilla, signed into law Law 251 of 2015 which amends the existing vacation and sick leave Act (Law 180 of 1998) in order to allow non-exempt employees working for employers with more than 15 employees and who have at least 5 days of sick time accrued, to use up to 5 days of sick leave per year to take care of an ill spouse, son or daughter (regardless of age), parents or any minor, elderly person (of 60 years of age and older) or disabled individual under their custody or tutelage. Just as it has been the custom with the use of regular sick leave, the employee using the leave for said purpose must only present a medical certificate when the absence is in excess of 2 days.

 

The bill, which was originally presented on January of 2013, and had been stalled for some time due to hefty opposition, is the latest of several constituent friendly legislation that may find its way to the Governor’s desk this election year.

 

We are available to assist you in your compliance efforts as it pertains to this new legislation.  For more information, feel free to contact Carmen Lucía Rodríguez or Gerardo J. Hernández at clrodriguez@nrlawpr.com or ghernandez@nrlawpr.com.